– Increasing capital deployment guidance to over US$1.25 billion deployed for the five years ending 2025 –
– Now expecting high-teens Royalty Income CAGR through 2025 and mid- to high-single digit Royalty Income CAGR through 2030, excluding any new transactions –
TORONTO, Feb. 1, 2024 /CNW/ - DRI Healthcare Trust (TSX: DHT.UN) (TSX: DHT.U) (the "Trust"), a global leader in providing financing to advance innovation in the life sciences industry, has expanded its interest in royalties on the US net sales of Omidria by amending its existing agreement with Omeros Corporation ("Omeros") for US$115 million on closing and up to US$55 million in potential sales-based milestone payments. As a result, the Trust will now receive 100% of Omeros' royalties on the US net sales of Omidria through December 31, 2031.
Omidria was approved by the US Food and Drug Administration in May 2014 and the European Medicines Agency in July 2015 for intracameral use during cataract surgery or intraocular lens replacement to maintain pupil dilation and reduce postoperative pain. Omidria was launched in the United States in 2014 but has yet to be launched in the European Union. Omidria is marketed by Rayner Surgical, one of the world's leaders in the field of cataract surgery with operations in over 80 countries worldwide.
Increased Capital Deployment Target and CAGR Guidance
DRI Healthcare is increasing its deployment target for the five years ending 2025 to over US$1.25 billion, up from US$850 million to US$900 million. Since its initial public offering, the Trust has deployed US$881 million with potential milestones up to US$106 million, for total potential deployment of up to US$987 million in 12 transactions. DRI Healthcare continues to see significant opportunities in the market with a robust pipeline of over US$3.0 billion in possible transactions in the near- to medium-term. As a result of the Omidria transaction, DRI Healthcare is increasing its long-term Royalty Income CAGR guidance (2022 through 2030) to mid- to high-single digits, up from the prior guidance of low single digits, excluding any new transactions.
"We are excited to increase our royalty entitlement on Omidria as this deal not only generates immediate accretive value for unitholders but also gives us exposure to an important non-opioid pain drug that provides an alternative to physicians combating the ongoing opioid epidemic," said Behzad Khosrowshahi, Chief Executive Officer of the Trust. "Bolstering our balance sheet over the recent months with equity raises and the expansion of our credit facilities laid the foundation for us to continue the strong execution we saw in 2023. With this transaction, we now have upside exposure to Omidria which will have a significant impact on both our near- and long-term cash flow profile. We are updating our guidance to reflect the next phase of growth for DRI Healthcare including a new deployment target and increased CAGR guidance."
Speaking on behalf of the investment manager, Chief Investment Officer Navin Jacob commented, "This transaction highlights DRI Healthcare's focus on creating winning solutions for our partners while remaining steadfast in our mission to deliver accretive returns to unitholders. We value our long-term partnership with Omeros and were happy to once again work with the management team to address their business and financial needs. Omidria's Separate Payment Status established in 2021 coupled with the Consolidated Appropriations Act 2023 ("CAA'23") provides long-term clarity on reimbursement for the product. We believe CAA'23 will provide reimbursement for Omidria in the hospital outpatient department setting starting in 2025, and as such we anticipate Omidria sales to continue growing in the coming years. We would like to thank the Omeros team for working with us to complete this transaction."
The transaction entitles DRI Healthcare to Omeros' entire 30% royalty on the US net sales of Omidria through December 31, 2031. DRI Healthcare is entitled to receive monthly royalty payments on a two-month lag based on sales beginning November 1, 2023, with its first payment to be received in January 2024. Omeros is also eligible to receive from DRI two milestone payments, each up to $27.5 million, payable in January 2026 and January 2028, respectively, based on achievement of certain OMIDRIA net sales thresholds.
About Omidria
Omidria is a bisulfite-free and preservative-free product that is indicated for intracameral irrigation during cataract surgery to maintain pupil dilation and reduce post operative pain. Sufficient mydriasis during cataract surgery is critical to a successful surgical outcome by providing visualization of the surgical field, a good red reflex and adequate room for intraocular manipulation of surgical instruments. Unlike pre-operatively administered topical drugs for mydriasis and pain management that are washed out of the eye by irrigation solution used during intraocular lens replacement, intracameral irrigation of Omidria exposes target tissues to consistent concentrations of phenylephrine and ketorolac through-out the entire procedure thereby maintaining intraoperative mydriasis and reducing post operative pain.
Omidria requires no modification to the current surgical procedure offering an easy addition to current treatments and surgical technique and, unlike products from unregistered compounding facilities, offers the added benefit of uniform production under Good Manufacturing Practices. There are no other intracameral administered mydriatic or pain management products in development.
About DRI Healthcare Trust
DRI Healthcare Trust is managed by DRI Capital Inc. ("DRI Capital"), the pioneer in global pharmaceutical royalty monetization with a more than 30-year history of accelerating innovation by providing capital to inventors, academic institutions and biopharma companies. Since its founding in 1989, DRI Capital has deployed more than US$3.0 billion, acquiring more than 70 royalties on 45-plus drugs, including Eylea, Keytruda, Orserdu, Spinraza, Stelara, Vonjo, Zejula and Zytiga. DRI Healthcare Trust's units are listed and trade on the Toronto Stock Exchange in Canadian dollars under the symbol "DHT.UN" and in U.S. dollars under the symbol "DHT.U". To learn more, visit drihealthcare.com or follow us on LinkedIn. References in this news release to "DRI Healthcare", "us", "we" and "our" refer to the Trust and its subsidiaries, on a consolidated basis.
Caution concerning forward-looking statements
This news release may contain forward-looking information within the meaning of applicable securities legislation. Forward-looking information generally can be identified by the use of words such as "expect", "continue", "anticipate", "intend", "aim", "plan", "believe", "budget", "estimate", "forecast", "foresee", "close to", "target", "guidance" or negative versions thereof and similar expressions. Some of the specific forward-looking information in this news release may include, among other things, statements regarding our deployment target and capacity available for deployment, portfolio, royalty cash receipts, the timing of royalty payments, growth in total income, anticipated royalty income, anticipated sales of the products underlying our royalties and our ability to reach our targets and expected timing of reimbursement for Omidria. This forward-looking information is subject to a number of assumptions, including, but not limited to: statements regarding potential royalty transactions which we reasonably expect to complete are based on our historical track record, statements regarding the terms and conditions of our transactions are based on the transaction documentation, statements with respect to royalty income, total income and future sales of the products underlying our existing royalties are based on assumptions with respect to timing of generic drugs entering the market, competitor drugs receiving approval and entering the market, and regulatory measures under the Inflation Reduction Act, and statements regarding expected timing of reimbursement for Omidria under the CAA'23 are based on our and our expert consultant's interpretation of the legislation, and are subject to a number of risks and uncertainties, many of which are beyond the Trust's control, that could cause actual results to differ materially from those that are disclosed in or implied by such forward-looking information. These risks and uncertainties include, but are not limited to, those that are disclosed in the Trust's most recent annual information form. The anticipated royalty terms for products in our portfolio may be shorter than the period of patent protection for the applicable product, depending on many factors, including the entry of generic drugs into the marketplace and competition, all of which are outside our control. All forward-looking information in this news release speaks as of the date of this news release. The Trust does not undertake to update any such forward-looking information whether as a result of new information, future events or otherwise except as required by law. Additional information about these assumptions and risks and uncertainties is contained in the Trust's filings with securities regulators, including its latest annual information form and Management's Discussion and Analysis. These filings are also available at the Trust's website at drihealthcare.com.
